I’ve been hearing numerous commercials on the radio, mostly for Chrysler/Dodge vehicles, that use the phrase “well-qualified buyers” (and adding “not all buyers will qualify” later in the ad).
From context, this phrase appears to have replaced the old standard, “on approved credit” or “OAC”.
What is the reasoning behind this change? Does “well-qualified buyers” have some distinct difference in meaning compared to “on approved credit”? If not, what is the rationale behind the new terminology?
“Well-qualified” usually means a high credit score, somewhere around 660 and rising. “On approval of credit” does nothing to indicate to a potential buyer what kind of credit he or she needs to be approved.
My guess is that the old phrase allowed only two options: approved or rejected. The new double caveat allows three possiblities: Well-qualified buyers will get the great deal mentioned, some buyers will not qualify for the great deal but will qualify for a different deal, and other buyers will not qualify at all.
There’s a subset of your credit score that’s called a FICO Auto Industry Option, or Auto FICO. Actually, that’s not quite right - there are many companies calculating and selling credit scores, and Fair Isaac (aka FICO) just happens to be one of them.
I recall seeing the fine print in one ad that you need an Auto FICO of 720 or more to qualify for the zero-percent finance or whatever special terms they were offering. So, generally, you need to have some pretty spiffy credit-worthiness to qualify.
If your Auto FICO doesn’t meet their requirement, you’ll still be able to buy a car, but with a higher APR on the loan. Of course, if your score is so terrible that you’d have a better chance of assembling a car from scrap parts you find along the freeway, you’ll either be shooed out of the dealership or dumped into something wickedley sub-prime like a 24.99% APR.